Four members of the Paramount Global board directors will not stand for reelection at the media conglomerate’s annual meeting on June 4, the company confirmed in its latest proxy filing on Thursday.
The board will be reduced to a total of 7 directors, including Paramount’s non-executive chairwoman Shari Redstone, CEO Bob Bakish, Barbara Byrne, Linda Griego, Judith McHale, Charles E. Phillips, Jr., and Susan Schuman.
Three of the departing board members — Dawn Ostroff, Nicole Seligman and Frederick Terrell — are members of a special committee of independent board members formed in January to evaluate potential merger deals for the company, . The fourth member of the board, Rob Klieger, is not part of the special committee and is Redstone’s longtime attorney.
The four board members’ decision to not stand for reelection comes amid concerns over lawsuits stemming from merger discussions with David Ellson’s Skydance Media, which is in exclusive talks to acquire control of Paramount from Redstone’s National Amusements.
Ostroff is leaving Paramount’s board after a year, while Seligman exits after eight years. Seligman joined the Viacom board in 2016 prior to its merger with CBS in 2019. Klieger, who is Redstone’s longtime attorney, joined the CBS board in 2017 and stayed on following the merger with Viacom.
Though Skydance’s offer must still be approved by the independent committee, some investors have slammed the proposed deal as “sub-optimal” and “detrimental” to the company’s value and argue that it prioritizes Redstone over the company’s other shareholders. Investors have also accused the company of breaching its fiduciary responsibility by not pursuing talks with competing bidders.
They’ve urged the board to end its exclusive talks with Skydance and engage in competitive bidding negotiations. Redstone has indicated a preference for a deal with Skydance over a $26 billion all-cash offer from private equity firm Apollo Global Management, which was reportedly rebuffed due to concerns around how the bid would be financed. Paramount Global CEO Bob Bakish also met with Warner Bros. Discovery CEO David Zaslav in December about a potential merger, though those talks have since halted. Byron Allen placed a $30 billion bid including debt for the company, though it’s unclear how that deal would be financed.
One major investor, Aspen Sky Trust, also asked the board to forego discussions with any future bidders that would “propose instant rewards for one or a few interested parties while saddling the remaining shareholders with all the risk or, even more concerning, unbridled dilution of value as presented in the current set of circumstances.”
Skydance, which is valued at more than $4 billion, has been a coproducer with Paramount on projects such as the “Mission: Impossible” franchise and “Top Gun: Maverick.” Its deal, which CNBC reported would include raising new equity and an ownership stake of somewhere between 45% to just over 50%, would be financed with the help of a consortium of investors, including private equity firms RedBird Capital Partners and KKR, as well as Larry Ellison, Ellison’s father and Oracle’s cofounder.
The senior Ellison would reportedly put up some of the new funding and potentially provide Paramount with access to artificial intelligence software and other data technology from Oracle. David Ellison, meanwhile, would likely lead the new company, while former NBCUniversal CEO Jeff Shell would also have a major leadership role. Additionally, management would reportedly be open to divestitures of assets, such as BET Media Group. Bloomberg separately reported that Skydance would look to merge Paramount+ with a rival, such as Peacock, Max or Prime Video, and would hold onto CBS.
Redstone’s National Amusements, which currently owns 77.3% of Paramount’s Class A (voting) common stock and 5.2% of its Class B common stock, could receive over $2 billion in cash from the Skydance deal, according to the Wall Street Journal. Skydance would reportedly be acquired in an all-stock deal valued at around $5 billion.
Shares of Paramount, which climbed 7% during Thursday’s trading session, are down 21% year to date.
